Everyone in the health club industry has heard the idea that low-priced clubs are a "feeder system" to full-service health clubs. The low-priced guys themselves like to trot out this idea when they are trying to deflect the hatred spewed their way from owners of full-service clubs. Their argument is basically, "Don't hate us, because at some point our members might want more than we can offer, and they'll come look at your facility."
Except they won't.
Once the $10-per-month virus has entered a member's system, our experience shows that it can never be cured. There seem to be two causes for this. One, most people really don't want what our industry is selling, so if they can get it, whatever "it" is, for $10 per month, they are thrilled. Two, most consumers assume that every health club is the same, so why would they ever pay more? Once someone has been a member of a low-priced club, there's not even an intellectual acknowledgement about why different health clubs might have different prices. They'll say, "Oh, so you have a pool and classes and childcare and towel service and trainers who can answer my questions? That's great. But my last club charged me $10 a month."
We've been seeing this as people move to our area and call for pricing. They are obviously gym-goers because these are the type of people who look for a new club immediately upon arriving in a new home. Yet, all they care about is price, and they even like to lecture us about how we'd get more members if we charged less. (The part of that suggestion that would cause us to go out of business doesn't seem to interest them.)
Another group that isn't out there shopping for full-service health clubs is the large population of former members of low-priced clubs who got what they paid for at $10 per month, canceled their memberships, and now will never enter a gym again. With the $10-per-month virus having infected them and the ongoing assumption that all health clubs are the same, we aren't counting on seeing a lot of these folks.
So, let's stop with the myth that a significant number of people will "graduate" from a low-priced club to a full-service club. They won't. The key for full-service providers is to win the initial sales battle when a consumer is first shopping for a gym. How to win that battle is a topic for another day, but make no mistake that you have to get these new members first, before the $10-per-month virus infects the patient.